West Texas Intermediate (“WTI”) crude is hovering around the $100-per-barrel mark. The high prices are being driven by ongoing tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $84.65 per barrel for this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting ExxonMobil Holdings Corporation’s XOM exploration and production activities, which generate the majority of its earnings.
The company has a massive footprint in the Permian, the most prolific oil and gas play in the United States, and offshore Guyana. In the Permian, the integrated giant has been employing new drilling techniques and artificial intelligence to boost and optimize production volumes at lower cost structures.
In Guyana, XOM has made several oil and gas discoveries, further highlighting its solid production outlook. Robust production from both assets has been aiding its top and bottom lines. In both resources, the breakeven costs are low.
Will CVX & COP Also Gain From High Oil?
Like XOM, Chevron Corporation CVX and ConocoPhillips COP will benefit from the ongoing strength in oil prices. Let’s delve a little deeper.
With COP generating a significant proportion of revenues from crude oil, the high price of the commodity is extremely favorable for the leading oil and gas exploration and production company, much like other energy giants such as XOM and CVX.
The upstream energy giant also has low-cost drilling opportunities across the Permian, Eagle Ford and Bakken that could be successfully developed over two decades. Thus, the outlook for ConocoPhillips’ upstream operations looks bright.
Chevron, on the other hand, has been witnessing growth in production volumes, thanks to its footprint in the Permian – the most prolific basin in the United States. CVX is thus well-poised to gain from prevailing high oil prices.
XOM’s Price Performance, Valuation & Estimates
Shares of XOM have gained 43.7% over the past year compared with the industry’s growth of 49.4%.
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 9.12X. This is above the broader industry average of 6.04X.
The Zacks Consensus Estimate for XOM’s 2026 earnings hasn’t seen any revisions over the past seven days.
ExxonMobil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ExxonMobil Holdings Corporation (XOM): Free Stock Analysis Report
Chevron Corporation (CVX): Free Stock Analysis Report
ConocoPhillips (COP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).